Melbourne-based oil and margarine manufacturing company Peerless Foods has snubbed the multi-national ERP vendors and developed its own software to manage everything from invoices to product distribution.
Peerless CIO Adrian Hamilton said a lack of commercial software options led the company to develop an entire manufacturing system in-house – right down to the physical control systems for a fully automated warehouse.
“It can integrate all the bill of materials and locate exactly where a product is in the warehouse,” Hamilton said. “We want to send the oldest stock out first so we can rotate it out properly.”
The data can be presented in a flexible way, for example a forklift operator gets picking information directly to the forklift over the wireless network, or it can be displayed on a Web page.
Hamilton estimates the company is saving between $300,000 to $400,000 a year in licensing fees by using its own code and for a $400 million business that's about 1 per cent of revenue.
“We have looked at commercial modules for it, but they are restrictive and the cost is horrendous,” he said. “Everyone I show is amazed at the complete integration it has.”
“Owning the source code gives us complete flexibility to run the business. I do software releases every week and there is no way I could do this with something like SAP. If we open a new warehouse we can deploy our software to it quickly.”
Peerless has nine full-time developers and at any one time runs a tight IT shop of 12 people, including system administrators.
“With strict testing regimes the amount of bugs is minimal,” Hamilton said. “The development environment is like SQL. There is nothing that I can't do with OpenROAD and Ingres that I couldn't do with Oracle or SQLServer.”
Peerless has standardised on Solaris on Sun for its Ingres environment.
“From a staffing point of view there is a lot more satisfaction among the programmers. New business functionality is something a programmer can get satisfaction out of, and I get more satisfaction in getting more involved with the business.”
Hamilton also praised the Ingres database for its stability and features and said he doesn't know why it hasn't received more exposure.
“We are using it extensively across the whole business – it's open source and flexible,” he said. “My site license fee is $30,000 and if I used oracle it would be around $180,000. But Oracle is also a good product.”
The software has been in development for 15 years and started out like AccPac accounting, but is now vertically integrated across planning and SCM.
While the Peerless ERP software is sold to business in the plant hire and gamin industries, Hamilton said it is not specific to manufacturing.
“It does give us competitive advantage in that we can do whatever we want. The business has the opportunity to take a project and be proactive. And the visibility of the data is good.”
Whether the software will be released as an open source or commercial off-the-shelf product is still under consideration.